It's old (1920's), needs some work and is in a relatively crappy (but not dangerous) neighborhood.Anyway, I (STUPIDLY) rented to two guys with less than great credit thinking that they would be working all the time and be able to take care of maintenance issues on their own (in the lease).

As a borrower myself here in Southern CA, I have done at least 40 fractionalized notes with lenders and navigating through this process as a lender without experience (not sure what your experience is since it was not mentioned) can also be dangerous without the proper guidance.As David mentioned, $110k in CA is not likely enough to get you in first position without fractionalization.

If you don't have a ton of cash flow and no liquidity it can be a really dangerous path.

It can also be pretty dangerous if you try to reinvent the wheel or get too creative. 

Emphasize the simple truth, that you don't know if the water leak is putting the other tenants in danger, as it put you in danger.

The danger is that if the PA Real Estate Commission decides to come after you, you're not going to "win" in any scenario.

The danger is that the insurance company doesn't screen the way a Landlord would.

Most mold is not dangerous and - as you pointed out - it's everywhere, even in the air outside.

Rodric,There is a great article, I think Brandon Turner wrote it, on here discussing the potential dangers of wholesaling without a real estate license.

There's no shortage of people that can easily afford $500k with the "average Joe's" being the ones who tend to rent in the area, double and triple up in apartments, commute from far away where prices are cheaper, live in the more dangerous parts of town.